What Happens When the Federal Interest Rate Gets Cut

A cut in the Federal Reserve interest rate could be favorable news for your credit card and loans. It could be an opportunity to shift from one credit card to another by doing a balance transfer or refinance your mortgage loan. If your creditor is not willing to budge on your interest rate owing to the fact that you are locked in to a fixed interest credit card or Mortgage than this may be a good time for you to refinance or do a balance transfer. Depending on the size of the debt even a small difference in the federal interest rate can mean difference of hundreds of dollars every month. This means that you will get to pay off your debt faster. Your minimum payments every month will be reduced and by keeping the payment that you are making on your debt same you will be able to pay off your debt faster. And changes in the federal rate would affect credit card and loans immediately, typically taking 2 to 3 months before effecting in your line of credit.

Although this may be a good opportunity to find yourself a balance transfer card or refinance your Mortgage equal weight a higher credit score will find it easier to find a 0% balance transfer card or a Mortgage don’t with a lower rate of interest.